Balanced and moderately diversified portfolio with a focus on large-cap equities and ESG considerations

Report created on Jun 12, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio primarily invests in large-cap equities, with 60% allocated to the Vanguard 500 Index Fund Institutional Select Shares, reflecting a strong focus on the S&P 500 companies. The inclusion of the Blackrock Mid Cap Equity Index Fund and Blackrock Russell 2000 Index Fund, each constituting 20% and 10% of the portfolio, respectively, introduces mid and small-cap exposures. The iShares ESG Advanced MSCI EAFE Index ETF, making up 10%, adds an international dimension with an ESG (Environmental, Social, and Governance) focus. This composition suggests an attempt at diversification across market capitalizations and geographic regions, though it leans heavily towards U.S. equities.

Growth Info

Historically, the portfolio has shown a Compound Annual Growth Rate (CAGR) of 14.92%, with a maximum drawdown of -24.70%. Notably, a small number of days (21) contributed to 90% of the returns, indicating that performance peaks are concentrated in short bursts. This performance metric, compared to benchmarks, would likely place the portfolio in a favorable light, assuming the benchmark's volatility and drawdowns are in a similar range. However, the reliance on a few significant days for returns underscores the importance of staying invested through market cycles.

Projection Info

Monte Carlo simulations, using 1,000 iterations, project a wide range of outcomes with a median increase of 395.9% in portfolio value, highlighting the potential for substantial growth. The simulations also show a high likelihood (987 out of 1,000) of positive returns, reinforcing the portfolio's robustness against a variety of market conditions. However, the reliance on historical data in these projections means they cannot account for unforeseen market shifts or global economic changes, underscoring the importance of regular portfolio reviews.

Asset classes Info

  • Stocks
    70%

The portfolio's asset allocation is heavily skewed towards stocks (70%), with no allocation to cash or other asset classes. This concentration in equities enhances growth potential but also increases volatility and risk, particularly in market downturns. Diversifying into other asset classes such as bonds or real estate investment trusts (REITs) could provide income and reduce overall portfolio volatility, balancing the growth orientation with risk mitigation strategies.

Sectors Info

  • Technology
    21%
  • Financials
    11%
  • Health Care
    8%
  • Industrials
    6%
  • Telecommunications
    6%
  • Consumer Discretionary
    6%
  • Consumer Staples
    4%
  • Energy
    2%
  • Real Estate
    2%
  • Basic Materials
    2%
  • Utilities
    2%

Sector allocation is led by Technology (21%), followed by Financial Services (11%) and Healthcare (8%), mirroring the sector distribution of many large-cap focused funds. This concentration in technology aligns with the sector's significant role in driving market performance in recent years but also exposes the portfolio to sector-specific risks, such as regulatory changes or market corrections. Diversifying into additional sectors with lower correlation to the portfolio's mainstays could offer protection against sector-specific downturns.

Regions Info

  • North America
    60%
  • Europe Developed
    7%
  • Japan
    2%
  • Asia Developed
    1%

Geographic allocation is predominantly North American (60%), with limited exposure to developed markets in Europe (7%) and Japan (2%). This concentration may limit the portfolio's ability to capitalize on growth opportunities in emerging markets or other developed markets outside the U.S. Expanding geographic diversification could reduce the impact of regional economic downturns and take advantage of global growth dynamics.

Market capitalization Info

  • Mega-cap
    32%
  • Large-cap
    25%
  • Mid-cap
    12%
  • Small-cap
    1%

The portfolio's market capitalization breakdown shows a strong lean towards mega (32%) and big (25%) cap stocks, with minimal exposure to medium (12%) and small (1%) caps. This skew towards larger companies typically offers stability and lower volatility but may cap the portfolio's growth potential. Incorporating a broader mix of medium and small-cap stocks could introduce higher growth prospects at the cost of increased risk.

Redundant positions Info

  • Wilmington Trust Retirement & Institutional Services Co. - Blackrock Russell 2000 Index Fund
    Wilmington Trust Retirement & Institutional Services Co. - Blackrock Mid Cap Equity Index Fund
    High correlation

The high correlation between the Blackrock Mid Cap Equity Index Fund and the Blackrock Russell 2000 Index Fund suggests redundancy, limiting diversification benefits. High correlation among assets means they tend to move in the same direction during market changes, which can amplify losses during downturns. Reducing overlap by reallocating from one of these funds to a less correlated asset could enhance portfolio resilience.

Risk vs. return

This chart shows the Efficient Frontier, calculated using your current assets with different allocation combinations. It highlights the best balance between risk and return based on historical data. "Efficient" portfolios maximize returns for a given risk or minimize risk for a given return. Portfolios below the curve are less efficient. This is informational and not a recommendation to buy or sell any assets.

Click on the colored dots to explore allocations.

Optimization efforts should initially focus on addressing the portfolio's high correlation issues, particularly between the mid and small-cap funds. Utilizing the Efficient Frontier concept could help identify an allocation that offers the best possible risk-return trade-off given the current assets. However, optimizing solely for efficiency might overlook other strategic goals like increased diversification or ESG considerations. Balancing these factors is key to achieving a well-rounded investment strategy.

Dividends Info

  • iShares ESG Advanced MSCI EAFE Index ETF 1.20%
  • VANGUARD 500 INDEX FUND INSTITUTIONAL SELECT SHARES 1.30%
  • Weighted yield (per year) 0.90%

The dividend yields from the Vanguard 500 Index Fund Institutional Select Shares (1.30%) and the iShares ESG Advanced MSCI EAFE Index ETF (1.20%) contribute to the portfolio's total yield of 0.90%. While not the primary focus, these dividends offer a steady income stream, which can be reinvested for compound growth or used as income. Considering the portfolio's growth orientation, monitoring dividend-yielding investments for their performance and sustainability is advisable.

Ongoing product costs Info

  • iShares ESG Advanced MSCI EAFE Index ETF 0.12%
  • VANGUARD 500 INDEX FUND INSTITUTIONAL SELECT SHARES 0.01%
  • Weighted costs total (per year) 0.02%

The portfolio benefits from low costs, with Total Expense Ratios (TER) of 0.01% for the Vanguard fund and 0.12% for the iShares ESG ETF, leading to an overall low impact on returns. Lower costs translate directly into higher net returns over time, making this an advantageous aspect of the portfolio. Maintaining a focus on cost efficiency, especially when considering new investments, will continue to support performance.

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